President Biden continues to pile up the nation's debt like a stack of Jenga blocks, and some economists are sounding the alarm bells. "This year, we are going to have another three-trillion dollar deficit (on top of three-trillion last year), and with the infrastructure program even bigger than that," says Peter Morici, economist at the University of Maryland.
All of that debt combined with all the stimulus money and new money floating around as economic activity resumes out of the pandemic threatens two outcomes. "Either that pushes up interest rates, or the Federal Reserve prints a lot of money to buy the bonds," says Morici. "In this environment, if the Fed does that, we're going to have a lot of inflation."
Morici tells KTRH if the Fed keeps interest rates low as promised, then all of this new money flooding the economy could lead to runaway inflation. "The economy does function in certain ways, and we could be headed for trouble," he continues.
Morici doesn't blame Biden as much as Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, whom he accuses of enabling the president's spending spree. "I don't think Biden is thinking that much about economic policy and those kinds of things," he says. "I believe this stuff is being fed to him by his far-left advisers."
"Chairman Powell has told us not to be concerned about inflation, but he has not explained why we shouldn't worry about it," he continues. "And Treasury Secretary Yellen is a labor economist."
"Between the two of them, they seem to have a thimble-full of knowledge about inflation and the economy."